Petropavlovsk completes refinancing but overhang remains

19th Mar 2015 08:52

Russian gold miner Petropavlovsk has completed its refinancing and reiterated its confidence in meeting 2015 production guidance.The company has issued 3.1bn rights issue shares and $100m of new bonds.Petropavlovk has seen a poor take-up rate for the 157-for-10 rights issue of just 35.35% and that the company's underwriters were unable to find any takers for the remaining 2bn shares and accordingly found themselves lumbered with those shares.Broker Shore Capital said it expected this "overhang" to weigh on the shares until it is cleared.However, chairman and founder Peter Hambro said the refinancing allowed management's focus to return onto operational achievement, as it seeks to rebuild shareholder value.He reconfirmed the business remained on track to achieve its 2015 production target of 680,000-700,000oz with expected total average cash costs of production for the year of less than $700/oz.Hambro has faced calls for his head by shareholders as the company's share price has plummeted from over £10 five years ago to less than 5p.On Thursday at 10:06 it was up almost 10% no the day at 4.83p.